Storehouse to open more BhS branches
The expansion plans were unveiled as Storehouse announced a 16.7 per cent increase in full-year profits to pounds 119m. The figures were welcomed by the City which had been braced for bad news from the retailer whose shares have fallen sharply since its Christmas trading statement in January.
The company's institutional shareholders had said the company's senior management such as Keith Edelman, chief executive, would have come under pressure if the results and accompanying trading statement did not show grounds for encouragement.
The company responded yesterday by making a series of frank admissions about management mistakes while increasing its levels of disclosure. It said the childrenswear market had been weak in the final quarter and had been badly affected by the continued boom in sales of branded sportswear.
Management also admitted that the group had too many unmodernised stores and out-of-date systems which had hampered its ability to provide customers with the right products at the right price and at the right time. Mr Edelman said: "Visiting some of our [BhS] stores you would think you were in the 1970s not the 1990s. It will take three years to make all the improvements."
The company plans to introduce branded sportswear to BhS stores while adding more fashionable clothing to Mothercare. Alan Smith, chairman, described 1996-97 as "a year of transition" when the company had moved from recovery to growth. He said Storehouse now had a stronger balance sheet, better margins and a stronger management team.
Pre-tax profits were affected by a pounds 20.5m charge relating to the acquisition of Children's World from Boots last year and the sale of the Blazer menswear business to Moss Bros. BhS profits rose 14 per cent to pounds 88m. Mothercare profits were 11 per cent higher at pounds 26.8m.
Mr Edelman said Mothercare had lost market share in the two to five age group but had held its position in the 0-2 age range. BhS had also held its share in childrenswear though both stores groups had been forced to increase the number of markdowns to shift stock.
Group sales were 15.3 per cent higher at pounds 1.25bn. The final dividend was increased by 14 per cent to 4.8p per share making 8.1p for the year.
Investment column, page 24
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